The short holiday week brought a flurry of economic reports last week. Highlights included pending home sales, the S&P Case-Shiller Housing Market Indices and the FHFA home price index. No reports were released on Thursday and Friday in observance of the Thanksgiving holiday.
Mortgage Debt Rises For First Time Since Recession
Last week was relatively quiet concerning scheduled housing-related news, but the Federal Reserve’s financial accounts report, released on Monday, indicated that mortgage debt in the U.S. had increased for the first time since the first quarter (Q1) of 2008.
Mortgage debt increased by a seasonally-adjusted annual rate of $87.4 billion, or 0.90 percent. Mortgage debt remains approximately 12.00 percent below pre-recession levels.
Increasing debt is not often considered good news, but in the case of mortgage debt in today’s economy, it suggests economic recovery in the form of higher home prices and fewer foreclosures.
Another instance of counter-intuitive economic results was released Tuesday. The Bureau of Labor Statistics (BLS) released its Job Openings and Labor Turnover Survey (JOLTS) report for October.
JOLTS indicated that 2.39 million workers quit their jobs in October. This was the highest number of jobs quit since 2008. While this may appear counter-productive to a growing economy, it indicates that workers are leaving their jobs for better positions.
Mortgage Rates Fall, Federal Budget Deficit Shrinks
On Wednesday the U.S. Treasury announced that November’s federal budget deficit had shrunk to -$135 billion from November 2012’s deficit reading of -$172 billion. This represents a year-over-year deficit decrease of 21 percent.
Freddie Mac’s Primary Mortgage Market Survey (PMMS) report provided good news as average mortgage rates fell last week. The average rate for a 30-year fixed rate mortgage fell from 4.46 percent to 4.42 percent. Discount points rose from the previous week’s reading of 0.50 percent to 0.70 percent.
15-year fixed rate mortgage rates fell from 3.47 percent to an average reading of 3.43 percent, with discount points rising from the prior week’s reading of 0.40 percent to 0.70 percent.
The average rate for a 5/1 adjustable rate mortgage dropped from 2.99 percent to 2.94 percent with discount points unchanged at 0.40 percent.
Lower mortgage rates are good news for home buyers facing higher home prices.
Weekly jobless claims rose last week. The previous week’s reading of 300,000 new jobless claims was short-lived as the reading for new jobless claims rose to 368,000 last week and surpassed a consensus of 335,000 new jobless claims.
Financial analysts cautioned that employment data can be volatile during the holidays, and noted that the four-week average of new unemployment claims rose by 6000 to 328,750.
Mortgage rates in Seattle will be reacting to Washington and the Federal Reserve not the data this week. Wednesday brings the FOMC and their policy statement and interest rate decision. While there will be no change in the Fed Funds Rate, the focus on Bernanke’s last press conference will be on whether or not the Fed will begin a reduction in their bond buying program or some guidance on when the taper may begin.
|Date||Time (ET)||Economic Release||Actual||Market Expects||Prior|
|16-Dec||8:30 AM||Empire Manufacturing||–||5||-2.2|
|16-Dec||8:30 AM||Unit Labor Costs||–||-1.30%||-0.60%|
|16-Dec||9:00 AM||Net Long-Term TIC Flows||–||NA||$25.5B|
|16-Dec||9:15 AM||Capacity Utilization||–||NA||78.10%|
|16-Dec||9:15 AM||Industrial Production||–||0.40%||-0.10%|
|16-Dec||9:15 AM||Capacity Utilization||–||78.40%||78.10%|
|17-Dec||8:30 AM||Core CPI||–||0.10%||0.10%|
|17-Dec||8:30 AM||Current Account Balance||–||-$101.0B||-$98.9B|
|17-Dec||10:00 AM||NAHB Housing Market Index||–||55||54|
|18-Dec||7:00 AM||MBA Mortgage Index||–||NA||1.00%|
|18-Dec||8:30 AM||Housing Starts||–||915K||891K|
|18-Dec||8:30 AM||Housing Starts||–||920K||NA|
|18-Dec||8:30 AM||Housing Starts||–||950K||NA|
|18-Dec||8:30 AM||Building Permits||–||983K||1034K|
|18-Dec||10:30 AM||Crude Inventories||–||NA||-10.585M|
|18-Dec||2:00 PM||FOMC Rate Decision||–||0.25%||0.25%|
|19-Dec||8:30 AM||Continuing Claims||–||NA||NA|
|19-Dec||8:30 AM||Initial Claims||–||333K||368K|
|19-Dec||8:30 AM||Continuing Claims||–||2760K||2791K|
|19-Dec||10:00 AM||Existing Home Sales||–||5.00M||5.12M|
|19-Dec||10:00 AM||Philadelphia Fed||–||5||6.5|
|19-Dec||10:00 AM||Leading Indicators||–||0.60%||0.20%|
|19-Dec||10:30 AM||Natural Gas Inventories||–||NA||-81 bcf|
|20-Dec||8:30 AM||GDP – Third Estimate||–||3.60%||3.60%|
|20-Dec||8:30 AM||GDP Deflator – Third Estimate||–||2.00%||2.00%|
To see our last “This Week’s Mortgage Rates” post and check out the current trends click here. For more news on Washington state mortgage rates and national rates check out our Market News page!